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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-02-TC-066
Time Warner Cable ) MA0048 (Medford County)
)
Petition for Reconsideration )
and Refund Plan
ORDER ON RECONSIDERATION
Adopted: July 16, 2002 Released:
July 17, 2002
By the Chief, Enforcement Bureau:1
1. In this Order we consider a petition for
reconsideration ("Petition") of Cable Services Bureau
Order, DA 98-1839 ("Prior Order").2 In the Prior Order,
the Cable Services Bureau found the above-referenced
operator's ("Operator's")3 January 1, 1998 cable programming
services tier ("CPST") rate increase in the above-referenced
community to be unreasonable. Operator supplemented its
Petition with amended FCC Form 1240s and also filed a refund
plan ("Refund Plan"). In this Order, we grant Operator's
Petition, reject Operator's Refund Plan, and order refunds
consistent with this Order.
2. Under the provisions of the Communications Act4
that were in effect at the time the complaints were filed,
the Commission is authorized to review the CPST rates of
cable systems not subject to effective competition to ensure
that rates charged are not unreasonable. The Cable
Television Consumer Protection and Competition Act of 1992
("1992 Cable Act")5 and the Commission's rules required the
Commission to review CPST rates upon the filing of a valid
complaint by a subscriber or local franchising authority
("LFA"). The Telecommunications Act of 1996 ("1996 Act"),6
and the Commission's rules implementing the legislation
("Interim Rules"),7 required that a complaint against the
CPST rate be filed with the Commission by an LFA that has
received more than one subscriber complaint. The filing of
a valid complaint triggers an obligation upon the cable
operator to file a justification of its CPST rates.8 If the
Commission finds the rate to be unreasonable, it shall
determine the correct rate and any refund liability.9
3. Operators must use the FCC Form 1200 series to
justify rates for the period beginning May 15, 1994.10
Cable operators may file an FCC Form 1210 to justify
quarterly rate increases based on the addition and deletion
of channels, changes in certain external costs and
inflation.11 Operators may justify their rates on an annual
basis using FCC Form 1240 to reflect reasonably certain and
quantifiable changes in external costs, inflation, and the
number of regulated channels that are projected for the
twelve months following the rate change.12 Any incurred
cost that is not projected may be accrued with interest and
added to rates at a later time.13
4. In its Petition, Operator asserts that the Prior
Order contained a clerical error. In support of its
assertion, Operator submitted amended forms incorporating
all of the adjustments made by the Cable Services Bureau in
the Prior Order. We reviewed Operator's filing and agree
that a clerical error was made in the Prior Order. We find
Operator's revised calculated maximum permitted rate ("MPR")
of $19.66 to be reasonable, effective February 2, 1998 (the
date the first valid complaint was filed with the LFA)
through December 31, 1998 and we modify the Prior Order
accordingly. Because Operator's actual CPST rate of $20.12,
effective January 1, 1998 through December 31, 1998, exceeds
its revised calculated MPR of $19.66, we find Operator's
actual CPST rate of $20.12, effective February 2, 1998
through December 31, 1998, to be unreasonable.
5. Upon review of Operator's Refund Plan,14 we find
that the Refund Plan does not fulfill the requirements of
this Order. Operator calculated its refund liability based
on the Prior Order's MPR of $19.41, and calculated interest
only for 1998. We calculate Operator's refund liability as
follows: For the period from February 2, 1998 through
December 31, 1998,15 we calculate an overcharge of $0.46
per month per subscriber. Our total calculation, including
three percent franchise fees plus interest on the
overcharges and franchise fees through July 31, 2002, equals
$108,761.00. We order Operator to refund this amount, plus
any additional interest accrued to the date of refund, to
its CPST subscribers within 60 days of the release of this
Order.
6. Accordingly, IT IS ORDERED, pursuant to Section
1.106 of the Commission's rules, 47 C.F.R. § 1.106, that
Operator's petition for reconsideration IS GRANTED.
7. IT IS FURTHER ORDERED, pursuant to Sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. §§ 0.111 and
0.311, that In the Matter of Time Warner Cable, DA 98-1839,
13 FCC Rcd 19560 (CSB 1998) IS MODIFIED TO THE EXTENT
INDICATED HEREIN.
8. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 76.962 of the Commission's rules, 47 C.F.R. §§
0.111, 0.311 and §76.962, that Operator shall refund to
subscribers in the franchise area referenced above the total
amount of $108,761.00, plus any additional interest that
accrues between July 31, 2002 and the date of refund, within
60 days of the release of this Order.
9. IT IS FURTHER ORDERED, pursuant to Sections 0.111,
0.311 and 76.962 of the Commission's rules, 47 C.F.R. §§
0.111, 0.311 and §76.962, that Operator file a certificate
of compliance with the Chief, Enforcement Bureau, within 90
days of the release of this Order certifying its compliance
with this Order.
FEDERAL COMMUNICATIONS
COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 Effective March 25, 2002, the Commission transferred
responsibility for resolving cable programming services tier
rate complaints from the former Cable Services Bureau to the
Enforcement Bureau. See Establishment of the Media Bureau,
the Wireline Competition Bureau and the Consumer and
Governmental Affairs Bureau, Reorganization of the
International Bureau and Other Organizational Changes, FCC
02-10, 17 FCC Rcd 4672 (2002).
2 In the Matter of Time Warner Cable, DA 98-1839, 13 FCC Rcd
19560 (CSB 1998).
3 The term "Operator" includes Operator's successors and
predecessors in interest.
4 47 U.S.C. §543(c) (1996).
5 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
6 Pub. L. No. 104-104, 110 Stat. 56 (1996).
7 See Implementation of Cable Act Reform Provisions of the
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
8 See Section 76.956 of the Commission's rules, 47 C.F.R.
§76.956.
9 See Section 76.957 of the Commission's rules, 47 C.F.R.
§76.957.
10 See Section 76.922 of the Commission's rules, 47 C.F.R. §
76.922.
11 Id.
12 Id.
13 Id.
14 Operator calculated a total refund liability of
$131,622.03.
15 Operator's refund liability extends from the date of the
first valid complaint, February 2, 1998, through December
31, 1998.